I’ve built a six-figure online business through a combination of writing books, creating digital products, freelancing, and affiliate marketing. When I share the specific processes that I use to make sales or attract clients, it almost always involves online advertising in the form of Google, Facebook, or Amazon ads.
I also use non-paid traffic generation methods like SEO, but without paid advertising, it would have taken me a lot longer to find success. However, I always get a few comments on my articles or YouTube videos from people who make the following arguments:
“Paid ads don’t work.”
“I never click on ads, therefore I don’t believe other people click on ads.”
“Ads are too expensive and a waste of money.”
Allow me to debunk the first two arguments right away.
According to Statista, over $55 billion U.S. dollars were spent on search advertising in 2019. If online advertising didn’t work, why would businesses spend billions of dollars on them each year?
Advertisers are typically charged when a user clicks on an ad; therefore, there is plenty of evidence indicating that consumers are engaging with online ads. Not to mention that on search platforms like Google, ads can take up nearly half the listings on the first page of results. The ads are nearly indistinguishable from the organic listings aside from a subtle Ad icon that blends in with the rest of the text.
But what about the claim that online advertising is a waste of money?
This claim could be true, but only if you are misusing advertising.
The Wrong Way to Use Ads
I’ll freely admit that my first few attempts at running ads online were utter failures. However, I don’t consider the money I lost to be a total waste because it taught me a valuable lesson early on in my business journey.
The mistake that some people make (myself included) is that they use ads to try to make an immediate sale from cold traffic.
If you’re unfamiliar with the term, cold traffic refers to potential customers who are not yet familiar with you or your products and services. Essentially, you are a stranger to them. Even though they may eventually want to buy what you are offering, running an ad directly to your product or service too soon can be ineffective.
I often hear people use this relationship analogy when referring to advertising:
“You wouldn’t ask someone you just met to marry you. Why would you ask for a commitment (in this case a sale) from a potential customer that you just met?"
There are some exceptions.
For example, local businesses with positive reviews or “social proof” can use paid search ads to gain more customers. Direct to product ads can also work for some e-commerce products if the ad is carefully targeted.
However, in my world of selling books, digital products, and software, using ads to send someone directly to a sales page rarely works. That’s because there’s a difference between advertising and marketing.
Advertising vs. Marketing
In recent conversations with people starting online businesses, I noticed that some use the terms advertising and marketing interchangeably. However, they are not the same thing.
Advertising is the act of paying to get more eyeballs on your content.
Marketing is the content that you use to sell your product. To put it another way, it’s what you use to build relationships with potential customers online.
Running an ad online lets you put your marketing materials in front of more people. Therefore, if your marketing is ineffective, your ads will not result in sales.
Use Ads to Rapidly Test Your Marketing
Many people want their ads to be profitable from day one. Trust me, I felt the same way. I didn’t want to spend money unless I was guaranteed a return.
However, many fail to realize that advertising only amplifies the results you are already getting. It’s not a magic pill for making sales. Therefore, if you don’t have a marketing system in place that is already working, running ads won’t help.
The good news is that you can use paid advertising to test your marketing materials rapidly.
Yes, you will have to spend some money. You might even lose some. However, instead of viewing this as a loss, think of it as an investment in your business. You are investing money to figure out what works and what doesn’t.
Many ad platforms will give you an advertising credit to get started with. I believe Google gave me a $150 ad credit when I set up my account, so I didn’t even have to start spending my own money right away.
This approach is much faster than relying on SEO. It can take months for a new piece of content to show up organically in the search engines — and even then, there’s no guarantee that it will make it to the first page or two of results.
It’s also more reliable than social media because you have control over who sees your message and how often. It’s like a traffic faucet that you can turn off and on at your whim. You also don’t have to spend a lot to test your marketing content.
For example, if you pay to send 100 people to a landing page where you offer a free workshop and no one signs up, that’s a good indication that something is wrong with your messaging, your ad targeting, or both.
The real value of this approach is that you can find out if something works in a matter of hours or days, rather than weeks or months.
Yes, it does require trial and error. However, testing different pieces of marketing content is part of the work of selling.
People seem to want to skip over this step. You can’t magically conjure up an effective marketing campaign in a vacuum without any input from your potential customers. Testing different marketing offers with paid ads can also provide you with important data, like cost per click, cost per lead, and the cost to acquire a sale.
It is crucial to understand these numbers before you start scaling or spending more on advertising. If you take the time to test your marketing materials' effectiveness and know your numbers, you can use real data to predict your ad campaigns' outcome.
Are Ads Too Expensive?
Finally, let’s address the last argument I frequently hear about why paid ads don’t work — that ads are just too darn expensive.
What makes an ad expensive is not the cost per click — rather, it’s the cost to acquire a sale or customer. This is going to be different for everyone.
For example, a personal injury attorney might spend upwards of $500 per click for a Google ad targeting the keyword mesothelioma lawyer; however, one client could be worth hundreds of thousands, if not millions of dollars to the firm.
In contrast, I’m running a Google Ad campaign right now, where I’m paying $.07 per click to send people to a specific page on my website.
I know from testing that my cost to acquire a customer is around $3.00. Therefore, as long the product I’m selling costs more than $3.00, my ad campaign will be profitable.
I understand that not all niches will have access to keywords in this price range; however, I have reduced my ad costs significantly by doing expensive keyword research and focusing on long-tail keywords.
Use Long-Tail Keywords to Reduce Ad Cost
Long-tail keywords are specific phrases that your customer is searching for.
For example, instead of bidding on the keyword meal delivery, which is quite general and costs between $3.76 to $8.65 per click, I might try bidding on Christmas dinner delivery for a holiday marketing campaign.
Since no one else is currently bidding on that keyword, I should be able to get clicks for just a few cents each.
There are plenty of free and paid tools out there that you can use to do this kind of keyword research. I prefer to use the free Google keyword planner inside the Google Ads platform.
- Paid advertising works if you send traffic to marketing materials designed to convert cold traffic into warm leads and eventually into sales.
- You can use paid advertising to rapidly test and tweak your marketing materials.
- Paid advertising doesn’t have to be expensive. Do keyword research to find long-tail keywords to keep your cost-per-click low.